When does a loss occur?
Answer and explanation
Correct answer: When expenses become more than income
A business incurs a loss when its total expenses or costs exceed its total income or revenue for the relevant period. In simple terms, loss = expenses minus income when expenses are higher. Therefore option A is correct. Customer satisfaction or higher sales may help performance, but they do not alone determine the result without considering costs.
Frequently asked questions
What is the correct answer to this question?
When expenses become more than income
Why is this the correct answer?
A business incurs a loss when its total expenses or costs exceed its total income or revenue for the relevant period. In simple terms, loss = expenses minus income when expenses are higher. Therefore option A is correct. Customer satisfaction or higher sales may help performance, but they do not alone determine the result without considering costs.
Which subject and chapter does this question cover?
This is a Class 11 Business Studies question. Chapter: Business, Trade and Commerce. Topic: Business Risk.
